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Millenials and the Savings Account

One might assume that in times of long-lasting low interest rates, savings accounts have run their course as the ultimate form of financial investment. But, long-established habits are not so quick to change, and our warped attitude towards money and financial precautions continues to be passed on. Contrary to better knowledge, banks continue to market savings accounts as the ideal form of investment to millennials and Generation Z. And the older generation is still convinced: those who love their grandchildren, need to set up a savings account for them. The fact that, even as inflation rises, hardly more than a basic interest rate (which tends towards zero) is offered, remains unnoticed.

This poses the question: what are the alternatives to the “Maya the Bee cover note” or the “Hipp My Baby Savings Account”? For millennials, the answer is quite clear: a long-term perspective, i.e. 30 years, is particularly suitable for equity funds. An example of success: in the past 40 years, every investment into the DAX has gained profits after 13 years – despite all financial crises. Bonds also yield attractive returns, which the beloved grandchild will be sure to enjoy more in thirty years than the tediously saved-up, low-interest capital in the savings account, which has actually lost in value due to inflation.